Banking Reform

Mark Garnier Excerpts

Thursday 14th June 2012 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

I am grateful to my hon. Friend for his statement today, and also for these measures, which go a long way in dealing with the “too big to fail” problem, and in some ways deal with the “too small to start” problem. He will be aware that in the last 100 years, only one ab initio banking licence has been granted. Part of the problem is a reluctance on the part of officials at the FSA to grant new banking licences. Will he look again at the issue of competition in the Prudential Regulatory Authority, in order to try to help challenger banks enter the marketplace?

[Mr Hoban]

My hon. Friend makes a good point. As I have said, the Bank and the FSA are looking at prudential and conduct requirements to ensure that they are proportionate. However, the other thing I would say is that the implicit guarantee enjoyed by our bigger banks distorts competition. Our reforms tackle that, helping to create a more level playing field for new entrants and enabling them to compete properly with established players.